GASOLINE

The differentials for MR-size cargoes of 92RON gasoline on an FOB Northeast basis were unchanged. Talks on spot cargoes were inactive as neither bids nor offers for cargoes loading in February were reported. However, it was viewed that exports from China would not sharply decline than it had been earlier expected. It was possible that a sense of tight supply could be eased in Asia. In the country, due to the outbreak of COVID-19, demand at home was weakening, and pressures to export cargoes were strengthening. Exports of gasoline in January from China were expected at less than 1.0 mil mt, down 15% on month. Refiners in the country had yet to fix export schedules in February, so that they were not making moves to sell cargoes loading in the month.

NAPHTHA

In the Northeast Asia spot market, a Northeast Asia market source said that the differential for open-spec naphtha on a CFR Japan basis was at a premium of $5-8/mt to Japan quotations. However, market sentiment was soft on declining demand. Ethylene crack margin against naphtha was narrowing to $200/mt and ethylene productions were retreating. In Taiwan, Formosa Petrochemical Co (FPCC), the largest buyer of naphtha in the region was far from procuring spot cargoes due to deteriorating margins, and the company was pulling down the operation rates of its naphtha crackers from 90-95% to 80-85% on the average. In the meantime, it was reported that Lotte Chemical in South Korea was lowering the operations rates of its naphtha cracker to around 70% due to a failure at the unit related to produce propylene at its Daesan plant on Thursday morning.

MIDDLE DISTILLATES

The differentials for MR-size cargoes of gasoil on an FOB Northeast Asia basis strengthened on tight supply/demand fundamentals. Whereas supply from Northeast Asia was few, demand in Australia or Southeast Asia stayed firm and buying interests of traders continued. Amid limited exports from China, refiners in South Korea and Japan were increasing their offers, and the market level went up. On Wednesday, GS Caltex in South Korea sold 300,000bbl of 0.001% sulfur gasoil loading on Feb 20-24 through a tender at a premium of around 20cts/bbl to Singapore quotations on an FOB basis. A market source said that the buyer may be a Chinese trader.

FUEL OIL

The differential for SR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was unchanged. In South Korea, a residue fluid catalytic cracking unit (RFCC) at S-Oil Co's Onsan refinery had been reportedly shut down for a trouble although details were unknown. A market source in the country saw that supply of low sulfur fuel oil from the company would increase.